Power board mustn’t make consumers pay for its flaws

Published: 00:05, Sep 27,2017 | Updated: 00:24, Sep 27,2017

 
 

THE admission that both the Power Development Board and the Bangladesh Energy Regulatory Commission made — during cross-examinations at a public hearing on power distribution companies seeking increases in power prices — that the power board could increase its earning without increasing the prices is both disturbing and assuring. The power board at the hearing on Monday in proposals to increase bulk electricity price by Tk 0.72 to Tk 5.58 a unit, or kilowatt-hour, admitted that it could increase its earning by Tk 0.73 from sales of a unit of bulk electricity without increasing the price. This is disturbing in that with the proposition being in place, the regulatory commission has increased the average retail price of electricity by 69.25 per cent, from Tk 3.75 a kilowatt-hour to Tk 6.33 in eight phases between March 2010 and September 2015. The commission has also increased the price of bulk electricity by 106.75 per cent, from Tk 2.37 a unit to Tk 4.90 in seven phases between March 2011 and September 2015. Without attending to issues that could earn the power board profits, the board charging consumers illogically higher could very well be likened to institutional extortion. But what remains to be assuring is that the board should not now increase power prices any further.
The power board has so far increased power prices citing high prices of diesel and furnace oil used in power generation as a major reason. But while oil prices declined on the international market about three years ago, the government has not reduced oil prices on the domestic market, adding to the power generation cost, which came as a burden on consumers. And the amount saved could reach, according to the technical committee report of the Energy Regulatory Commission, about Tk 18.72 billion, or Tk 0.32 on a unit of electricity, only in the 2018 financial year if oil prices were reduced. The Consumers Association of Bangladesh, however, showed that the amount thus saved could reach about Tk 28.53 billion, or Tk 0.49 on a unit, if oil prices were adjusted to the level on the international market. The power board, as it came up in hearing, could save about Tk 8.56 billion a year if it could use the least-cost options in generation and about Tk 13 billion a year if it could rationalise capacity to rental power suppliers. The board comes up to have forced consumers to pay for the violation of contract in running a 305MW plant on diesel, which should have been, according to the contract, run on furnace oil, which has increased the generation cost by Tk 0.09 a unit.
In light of all that has happened, there are scopes to draw inferences that the power board, without stopping malpractice, without reforming procedural flaws and without rationalising the structure, has only tried to pass the burden on to the consumers. The government, therefore, must attend to such issues and reduce electricity prices. It is also time that consumers mounted effective pressure on the government to make this happen.

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